The increasing complexity of corporate governance and the growing list of action items assigned to directors has led to a division of labor that leaves some directors uninvolved or unaware of important board activities and responsibilities.
“The board’s division of labor across its standing committees facilitates decision-making in our world of audit, compensation and governance complexity. But in the process, there are manifold opportunities for some directors, who are not on one committee or the other, to get “left behind” other directors in their exposure to, and grasp of, key risks, opportunities and even basic operational desiderata,” observes author Tom Dougherty in the new 2015 Edition of The Directors’ Handbook.
This issue, often magnified when temporary director subgroups form to tackle a new project or follow up on a matter in play, require a board culture that encourages robust sharing by committee heads and engaged directors who keep tabs on committee work and ask questions. “As simple as this may sound, instituting and following protocols…affirms a culture of mutual respect and support. Absent it, directors risk being left behind and board cohesion and decision-making sub-optimized,” Dougherty warns.
The Directors’ Handbook: A “thorough and thoughtful guide”
Tom Dougherty, recently named “2015 Boston Securities Regulation Lawyer of the Year” by The Best Lawyers in America, explores these and other timely issues in the 2015 Edition of The Directors’ Handbook, one of today’s leading resources for corporate governance.
In The Directors’ Handbook, Dougherty offers directors insight on how to best handle hostile takeover attempts and proxy battles, and offers analysis of such vital issues as creating an audit committee charter, crisis management, and director and officer insurance. He provides updated information about majority (rather than plurality) voting for directors; staggered board repeals; best practices for handling restatement crises; and the political economy of corporations and corporate governance approaches around the world. There is a chapter that addresses the role of the corporate secretary, as well as a CD-ROM containing the key cases and legislation that form the basis for corporate governance here and abroad.
In the 2015 Edition, Dougherty, a partner at Boston’s Skadden, Arps office, proposes that boards consider appointing small, dedicated administrative staff to coordinate and support director work as a way of addressing the mountain of additional board and committee obligations required by the Sarbanes Oxley Act. He also looks at the use of e-forums by publicly traded companies so that management and shareholder views can be shared in real time.
Other important updates include a new section on “say-on-pay” and proxy advisory firms; a new section that explores the takeover process in the United Kingdom and how those rules can impact U.S. companies; and a new section addressing recent Delaware court decisions impacting directors’ Revlon duty.
“A director’s job is exceptionally hard and exceptionally important,” Dougherty notes. “Directors’ watchwords for 2015 should continue to be vigilance, transparency, strategic vision and conflict of interest avoidance.”
To learn more about the 2015 Edition of The Directors’ Handbook, call 1.800.533.1637 or visit us online at www.lexisnexis.com/csc.